February 2018

Today on MarketWatchers LIVE, I did a workshop on bull and bear market rules. You'll hear many technicians discuss "bull market rules apply" or vice versa. The question is pertinent and timely right now. The jury is still out on whether we are about to enter a bear market phase but that doesn't mean that you don't want to think about 'bear market rules'. We are currently in a bull market. Based on DecisionPoint timing signals, the 50-EMA is above the 200-EMA. However, what about the correction?
Let's quickly consider what constitutes a bull or bear market. As I said
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Bond yields are rising a lot faster than a lot of people expected. And that's starting to worry stock holders. The weekly bars in Chart 1 show the 30-Year Treasury Yield rising over 3.00% for the first time since last March and heading up for a challenge of its early 2017 peak near 3.20%. A close above that more important chart barrier would be very bad news for holders of long Treasury bonds which are falling. The bigger news, however, is coming from the faster rise in 10-Year yields. The weekly bars in Chart 2 show the 10-Year Treasury Yield trading at a four-year high and nearing a
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Traders who are "all in" on the long side hate days like this past Friday when the market got slammed big time, with the Dow down 2.6%, the NASDAQ down 2.1% and the S&P down 2%, the worst overall showing in two years. And if you're wondering if traders were scared on the selling all you have to do is take a look at the VIX which shot up 30% as it reached levels not seen since late 2016.
Maybe the most interesting thing - or not - is earnings season has been determined by the analysts to so far have been quite successful with anywhere from 70-80% of companies beating expectations
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Identifying The Candidates
I've included the month-by-month seasonal information for all NASDAQ 100 ($NDX) stocks in an Excel spreadsheet. In an effort to identify the best seasonal stocks on the NDX, I first considered the number of years history for each stock. For instance, I eliminated JD.com (JD) because it only has 5 years of history. JD performs very well beginning in February, but I want a more representative sample size to feel good about its seasonal tendencies. For this ChartWatchers article, I eliminated NDX stocks having less than 10 years of
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Lithium LIT
Rare Earth Metals REMX
Steel SLX
Coal KOL
Book starts shipping next week!
Lithium, Steel and Rare Earth Metals all had a pretty good 2017. Each week on Commodities Countdown, I roll through the commodity markets. Steel (SLX) and Coal (KOL) have been performing well recently, but this week has slowed most charts. Lithium was an all-star performer in 2017 but looks shakier here. If you are a fundamental investor, you are in love with Lithium because of the electric car battery potential. Rare Earth Metals have also been rising on some of these fundamental
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Short-term Treasury yields have been moving sharply higher since September with the 5-yr and 2-yr yields hitting multi-year highs over the last few months. Yields at the long end of the curve are lagging, but appear to be catching up finally as the 10-yr yield broke out in January and the 30-yr yield broke out this week.
The chart below shows the 2-yr, 5-yr, 10-yr and 30-yr yields on one scale in the top window. This same-scale feature makes it easy to compare relative yields and spot the movers. The 2-yr yield (blue) moved straight up from September to early February and moved
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It's been nearly a month since we saw our last signal changes to the DecisionPoint Scoreboards, but with the pullback over the past week, momentum turned negative and now we are seeing new Price Momentum Oscillator (PMO) SELL signals on all four!
The Dow actually incurred its PMO SELL signal yesterday, but flew under my radar. The additional three PMO SELL signals landed on the boards today. On all four of the index charts below, I've marked various areas of support. In all four cases, they have now landed on intermediate-term support, but unfortunately, there is plenty of room
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